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Checkfree.com

Marino of Boca Raton FL writes (1/29/03):
I bank with Citibank but generate my checks via Quicken, which uses Checkfree.com. Recently, Checkfree.com started issuing and funding some of my check requests out of their corporate account. This sounds fine, but Checkfree is actually withdrawing the funds from my account early, well before the check has been cashed.

In a recent case, I had someone return one of my checks, but the funds had already been withdrawn from my account. From a personal perspective, I don't really care about Checkfree using my small $225 check as a source of float. But add up all those outstanding checks and Checkfree is getting a nice profit from a multiday float. To add insult to injury, Checkfree charges $9.95/month - it shows up as a pass-thru charge on my Citibank account, so until today, I didn't know I was using Checkfree as my check issuer.

I called Checkfree and they indicated they could not ensure that my checks would come from either Citibank or from their corporate account. Strangely, about half of my checks come from either source, it seems arbitrary. They were not too pleased with my inquiry and were rather rude - and that is what raised my suspicions. So the question is ... is Checkfree doing something permitted by law? I distinctly remember the banking laws changed in the 80's and 90's to prevent float abuse, looks like it has returned in another form.

Marino might not like it but what he describes sounds legal. There's always the question of whether there was misrepresentation. He'd had to scrutinize his service agreement to determine if Checkfree is doing what it pledged to do.

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